Bird

Well, the 2012 newsletter doesn't "suggest" that type of amendment can't be made, it clearly states it can't be made. While that isn't code or regs, in my world, that ends the discussion; I would just make the change effective Jan 1 of the next year and move on. It's hard to believe this kind of change to a SIMPLE is worth the risk of a $50/day penalty...if it is caught and questioned (which of course is highly, highly unlikely, but that reality being somewhat besides the point), then is the sponsor going to hire an attorney to argue the point...? Sorry to not engage the discussion further.

I have to think so. If it's good for an enrolled agent it must be good for an ERPA and it seems like a typical topic for ERPA credit.

What kind of amendment are you proposing? Changing from match to nonelective or vice versa? Either way, I see a world of difference between not providing a notice and changing the content of the notice. The point of the notice is to give participants an opportunity to plan the type of contribution they will make (or not make) based on the employer match (or non-match).

I think the important part of the spousal consent is not the form elected, but the form waived - that is, it should say the spouse understands that the effect of the waiver is to forfeit annuity benefits he or she would otherwise be entitled to receive upon the participant's death.

No. It says "his" S-corp. Presumably he is a 100% owner, for which there is no dispute about filing a one-participant SF.

Not necessarily, at least in general. If Jane bought a company from John, I'd expect her to be able to execute any and all documents for the new company. As far as whether that "should" be allowed for a non-profit, I imagine that's how they get in trouble. You may also want to look ahead and see what the financial institution wants for proof of the change, if you are involved in that end of things. They might want a guaranteed signature at the very least, and all kinds nonsensical stuff at worst.

I say no - it's phantom money in that case.

For whole life or other policies that have cash values, I agree with the auditor. Premium payments are effectively a transfer from one investment to another. Term would show up as an expense.

Interesting. I see what it says but to me, using 55 as NRA is just a way to allow participants to get money out and is not indicative of an expected retirement date. I'd hang my hat on the "such as" qualifier and use 65...hard to imagine anyone caring.

Thanks. If we just do 3% as an employer contribution in both plans then we're ok either way and that is what he wants to do anyway.

Thanks! We'll play it safe and allocate 3% no matter what.

Way back at the beginning it was stated that "he was the only other beneficiary" (presumable of the estate). I would definitely ask what he is trying to accomplish by having it paid to the estate as opposed to him directly. Odds are he's just confused and paying it to him directly saves everyone some hassles. I don't see it as improperly offering legal advice. If he comes back and says "I know what I'm doing" then fine, do it that way.

Yes. And I agree with your earlier post - the late deposit rules are all about prohibited transactions - the employer effectively borrowing plan money by not depositing it soon enough. If they deposit it timely, they have met the rules. If they don't provide info to allocate it, it might be some other fiduciary breach as you noted.

Agree. Once they came out with the SF/1 participant option, we started using it. Doing electronic filing for those folks, some of the most disorganized clients, is a godsend.

I think it is valid. If it would incur an extra processing fee then I'd advise the participant of that, just as a courtesy.

I vote for those with no account balances not counting at the end of 2016. If you wanted to look for trouble you could say that they are still earning service (i.e. being credited with years of service). But if the plan term'd in August and they would have been entitled to distributions had they had any money, you'd have to be a real...whatever...to still consider them as participants. If someone had money and was paid out, I don't think anyone would count them, right? Which raises the question of a plan term in August - and no one (?) taking their money...? That sounds/smells a bit fishy.

Kind of amusing how the credit union's internal auditors found the problem, which was that the credit union opened the account incorrectly - and the credit union doesn't know how to fix it. See what happens if you just open a new account to accept the SIMPLE contributions, and leave the old one alone. Probably nothing. It's not "right" but from a tax standpoint all those dollars will be treated the same in the long run.

Maybe I am overthinking this but I am stuck. I have a dentist, A, who owned half of the AB practice on 12/31/15. The plan is top heavy. He bought the other half as of 1/1/16 (stock sale). He owned all of the A practice on 12/31/15, and still owns it. That plan is not top heavy. The plans are maintained separately, at least through the end of 2016. If he makes deferral contributions to the A plan, does that trigger top heavy to AB?

If the plan has a last day requirement, with no exception for death, then you don't have to do anything - not employed on last day. If there is an exception for death, then that condition has already been met and it's too late to change. Payments would presumably be made from the estate, or, if the partner is owed money, it could come out of his distribution of profits or draw.

Agree, $4,367 must be distributed.

You'd have to do it to see how it works. We literally work from paper brokerage statements, or, for the really advance, pdfs...wow. There is no system linking the account to the plan. There is "investment management" and there is "administration" but there is no "recordkeeping." I guess if you have never worked anywhere but the daily val world it is unfathomable but it exists and works ok.

There's the rub - nobody is getting it until we say they are by literally amending the plan to say so in November.

I'm surprised this hasn't been brought up...if we have a safe harbor non-elective plan, which does not exclude HCEs from the SH, can we amend it to exclude HCEs at the time we say "definitely" later in the year? Or maybe we always could...? Because we are actually amending the plan to provide the SH? Raises the Q of whether the original "maybe" notice said "...we might make a 3% contribution for all participants..." or whether it dropped the word "all."

Like Mike said, it works well for a significant number of plans. As I tried to point out above, the dollars and percents involved are usually not that significant, and it evens out for the plan. Apples to apples, a non-daily valued plan is or should be less expensive to run, since recordkeeping costs something. (I've seen plenty of poorly run/managed pooled plans that were indeed better off daily val'd, but that is often a function of the management fees (too high). Another benefit is the sponsor can just "throw" money at the plan - if they have $1000 one month, and $10000 another, they/we can figure out the details later. Daily val'd requires you to allocate it when deposited. I'm not saying I'm setting up many new plans this way but there is definitely nothing "wrong" with it.

(I think) we are talking about a pooled account that is not self directed, annually valued. In theory each participant owns a proportionate share of each investment, but in reality, they are paid from cash. If there is not enough cash to pay them, you sell something; it does not have to be proportionate. If you have a $1 million plan, and a person with $5000 needs to be paid out, they get $5000. If the market is up or down by 10% after the latest val, that's a $500 gain or loss that is absorbed by other participants (.05% of the total; basically a rounding error). Not enough to worry about. If a person with $100,000 needs to be paid out, that's a different story - a 10% change is $10,000. (Still "only" 1.1% of the remaining assets but significant dollars.) And that's the crux of the discussion; when is it "enough" to justify doing an interim val?